Introduction to innovationDefinitionsDimensionsDriversDevelopments

What is innovation?Innovation is the process and outcome of creating something new, which is also of value.

Innovation involves the whole process from opportunity identification, ideation or invention to development, prototyping, production marketing and sales, while entrepreneurship only needs to involve commercialization (Schumpeter).

What is innovation?Today it is said to involve the capacity to quickly adapt by adopting new innovations (products, processes, strategies, organization, etc)

Also, traditionally the focus has been on new products or processes, but recently new business models have come into focus, i.e. the way a firm delivers value and secures profits.

What is innovation?Schumpeter argued that innovation comes about through new combinations made by an entrepreneur, resulting in a new product, a new process, opening of new market, new way of organizing the business new sources of supply

Dimensions of innovationThere are several types of innovationProcess, product/service, strategy,which can vary in degree of newness:Incremental to radical, and impact:continuous to discontinuous

Drivers for innovationFinancial pressures to reduce costs, increase efficiency, do more with less, etcIncreased competitionShorter product life cyclesValue migrationStricter regulationIndustry and community needs for sustainable developmentIncreased demend for accountabilityDemographic, social and maket changesRising customer expectations regarding service and qualityChanging economyGreater availability of potentially useful technologies coupled with a need to exceed the competition in these technologies

What is innovation?Gary Hamel argued that todays market place is hostile to incumbents, who now needs to conduct radical business innovation:Radically reconceiving products and services, not just developing new products and servicesRedefining market spaceRedrawing industry boundaries

New conditions for innovationSmall start-up entrepreneurs increasingly depend on large firms: as suppliers or customersfor venture finance, for exit opportunites, for knowledge (production, markets and R&D) and for opening new markets.

New conditions for innovationLarge firms increasingly depend on small start-ups for NPD, as suppliers of new knowledge (which they cannot develop themselves), or organizational renewal, for experimentation with busienss models, for opening new markets, etc

New developments in innovation raises new issues and problemsGreater emphasis on commercializing scientific discoveries, particularly in IT and the bio-sciencesSpeed and potential value of scientific progress leads to emphasis on solid and well-designed portfolios of research projectsUniversites as active drivers of innovation: Academic entrepreneurship and the entrepreneurial university University-industry partnershipsIncreased search for radical innovation and top-line growth.